Cellulose Ether and Derivatives Market Size, Share & Trends Analysis Report By Product Type (Methyl Cellulose, Carboxymethyl Cellulose, Hydroxyethyl Cellulose, Hydroxypropyl Cellulose, Ethyl Cellulose), By Application (Construction, Pharmaceutical and Personal Care, Food and Beverage) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global cellulose ether and derivatives market size was valued at USD 6.5 billion in 2023 and is projected to reach USD 10.9 billion by 2032, registering a CAGR of 5.9% during the forecast period 2024-2032. Rising expansion in pharmaceutical applications is a key driver boosting cellulose ether and derivatives market share. 

Cellulose ether and its derivatives are a group of chemicals produced from cellulose, a natural polymer in the cell walls of plants. Cellulose ethers are synthesized by chemically altering cellulose, yielding a wide array of adaptable compounds that find utility in numerous industries. These derivatives are highly valued for their distinct characteristics, such as their ability to dissolve in water, their capacity to thicken substances, their capability to form a film, and their stability in various situations.

Rising demand for cellulose ether and its derivatives in pharmaceuticals, personal care, foods and beverages, paints, and coatings activities is a vital factor escalating the growth of cellulose ether and derivatives. Rising growth in pharmaceutical applications, an increasing number of construction companies, a rise in the number of oil drilling activities, and a rise in the global demand for polyvinyl chloride are the major factors driving the cellulose ether. Furthermore, expanding the use of CMC in the micro flotation process and increasing expansion in end-use industries in emerging nations would generate new opportunities for the cellulose ether and its derivatives market throughout the projection period.

Highlights

• Methyl Cellulose occupies the major share of the market by product type.
• Construction accounts for the largest share of the market based on application.

Market Dynamics

Market Drivers:

Rising Demand in Pharmaceuticals

Cellulose ethers are essential in the pharmaceutical industry as versatile excipients that can be used in various formulations. As pharmaceutical companies strive to create effective and patient-friendly drug delivery systems, cellulose ethers are widely used due to their unique binding capabilities, controlled release, and increased stability. For example, hydroxypropyl methylcellulose (HPMC), a widely used cellulose ether, is utilized as a binder to increase the cohesiveness of tablet constituents. It ensures the tablet's homogeneity and integrity, which allows for optimum medication release and absorption. The pharmaceutical excipients market, which includes cellulose ethers, has grown significantly. Binders have steadily gained recognition in the pharmaceutical industry for their ability to help active pharmaceutical components achieve improved functioning and provide a competitive edge.

Furthermore, as pharmaceutical production increases, the demand for binders will likely rise, driving the segment's expansion. For example, the India Brand Equity Foundation (IBEF) 2022 report ranked India third in pharmaceutical output by volume and 14th in value in 2022. Further, in October 2021, Beneo introduced galenIQ 721. It's a filler binder that enhances the flavor and stability of effervescent tablets and powders. The growing demand for pharmaceutical excipients, driven by increased generic drug manufacturing and the development of novel medication formulations, adds to the popularity of cellulose ethers in the pharmaceutical business.

Similarly, cellulose ethers provide essential pharmaceutical formulation criteria such as tablet binding, controlled drug release, and stability enhancement. As the pharmaceutical industry advances, with an emphasis on new drug delivery systems and patient compliance, demand for cellulose ethers is likely to rise further. Furthermore, the biocompatibility and safety of cellulose ethers contribute to their broad use in pharmaceutical applications. The rise of the pharmaceutical sector, fueled by global healthcare requirements and R&D initiatives, highlights the Cellulose Ether and Derivatives Market trend.

Market Restraints:

Stringent Environmental Regulations

Stringent environmental regulations present obstacles for the cellulose ether and derivatives industry, necessitating high requirements for manufacturing processes, chemical usage, and waste management. As governments and international organizations prioritize sustainability, cellulose ether makers face complex regulatory landscapes. In the European Union (EU), REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) laws impact the cellulose ether industry. REACH seeks to ensure the use of chemicals while safeguarding human health and the environment. Compliance with REACH necessitates significant data submission, risk assessments, and strict adherence to particular usage restrictions for some compounds used in cellulose ether manufacturing. In Europe, the price of cellulose ether is expected to rise in 2023 due to stricter environmental regulations and increased demand for eco-friendly building materials. 

Similarly, the Environment Protection Act of 1986 protects cellulose ethers and other chemicals. The Environment (Protection) Amendment Rules, 2023, were issued by the Ministry of Environment, Forest and Climate Change (MoEFCC) in 2023. The amendment revises the particulate matter emission standard for industrial boilers. The rules were notified on June 5, 2023, and will go into effect on June 5, 2025. 

Moreover, stringent environmental laws can substantially impact the cellulose ether market by affecting production prices and operating operations. Manufacturers may need to invest in cleaner technology, acquire sustainable raw materials, and execute waste reduction methods to comply with requirements. While this commitment to sustainability is consistent with broader environmental aims, it may pressure businesses to adjust their processes and supply networks.

Market Opportunity:

Expanding Construction Sectors in Emerging Markets

The growing construction sector in emerging nations offers substantial cellulose ether and derivatives market opportunities. As these areas experience fast urbanization and infrastructure development, demand for high-performance construction materials, especially those improved with cellulose ethers, is increasing. Emerging Asian economies like China and India are undergoing a construction boom fueled by urbanization and industrialization. In China, big infrastructure projects, such as transportation networks and residential complexes, drive up demand for construction chemicals. For example, the Belt and Road Initiative (BRI) Over 100 BRI deals were inked in the first half of 2023, totaling USD 43 billion, a roughly 20% increase from the same period in the previous year.

In addition, cellulose ethers, known to improve cement-based materials' workability and performance, find use in these initiatives. India, with its emphasis on cheap housing and smart city programs, is also helping to promote the usage of cellulose ethers in construction. The potential of cellulose ethers to improve the qualities of construction materials drives demand for them in growing market construction sectors. These materials are used for various purposes, including tile adhesives, grouts, cementitious renders, and mortars. Cellulose ethers improve workability, water retention, and adhesion, making building additives useful.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global cellulose ether and derivatives market shareholder and is estimated to grow at a CAGR of 5.5% over the forecast period. China, India, Pakistan, Bangladesh, Sri Lanka, and Thailand are a few of the major countries in the region that are boosting demand for cellulose ether and derivatives. The region's youth face various skin difficulties, including flaws, a skewed complexion, dryness, skin breakouts, scars, and dull patches. This gradually increased interest in beauty care products for home use. Increasing public knowledge of the advantages of cellulose ethers, such as their natural origin and ecologically favorable features, can push their acceptance in various fields.

Additionally, China's development and urbanization have increased the demand for construction materials. According to Morgan Stanley, China's urbanization rate may rise from 60% to 75% by 2030. This would result in 220 million more urban people, half residing in five super-city clusters. Cellulose ethers have uses in the construction industry, contributing to market growth. Further, expanding e-commerce and retail activity in Japan makes cellulose ether products more widely available. Japan is known for its strict quality requirements. The cellulose ether market benefits from using stringent quality standards, which ensure the safety and effectiveness of products.

Europe is anticipated to exhibit a CAGR of 6.2% over the forecast period. Germany, France, and the United Kingdom contribute to European market growth. The market's expansion is fueled by steady demand from the construction sector and the use of cellulose ethers in medicines, personal care items, and the food and beverage industry throughout Europe. Germany, Europe's largest economy, is a significant consumer of cellulose ethers in the construction industry. These derivatives are commonly employed as additives in cement-based products, adhesives, and coatings. For example, cellulose ethers help increase the workability, water retention, and general performance of self-leveling compounds used in flooring. The construction industry's concentration on environmentally friendly and high-quality building materials boosts demand for cellulose ethers in Germany and other European countries.

Furthermore, in the United Kingdom, cellulose ethers are widely utilized in personal care and cosmetic items such as creams, lotions, and shampoos. In the first quarter of 2023, personal care spending in the UK was estimated to be over 7.9 billion pounds. Britons spend £6.4 billion on cosmetics each year. The country's desire for skincare and cosmetics drives the expansion of the cellulose ether market.

The North American cellulose ether and derivatives market is driven by strong demand from various industries, including construction, pharmaceuticals, personal care, and food and beverage. The increase in residential and commercial construction projects adds to the need for cellulose ethers in the United States. In 2023, the US construction sector is predicted to rise by 6.1% to USD 1,419,192 million. Residential construction spending in 2023 was USD 864.9 billion, 5.8% lower than in 2022 (USD 917.9 billion). In December 2023, single-family home starts totaled 1,027,000, an 8.6% decrease from the previous figure of 1,124,000. Permits jumped 5.2% in May 2023 to its highest level since October 2022, totaling 1.491 million units.

Segmental Analysis

The global cellulose ether and derivatives market is segmented based on product type and application.

The market is further segmented by product type into Methyl Cellulose, Carboxymethyl Cellulose, Hydroxyethyl Cellulose, Hydroxypropyl Cellulose, and Ethyl Cellulose.

Methyl Cellulose occupies a significant share of the market.

Methyl Cellulose

Methylcellulose and its derivatives earned the most significant revenue among all categories, accounting for approximately 40% of total sales from cellulose ether and related items. Methyl cellulose is an ether made from natural sources like wood pulp or cotton. Its water-soluble characteristics distinguish it, producing a transparent and viscous solution. Methyl cellulose is widely used in various applications, including thickening, emulsifying, and stabilizing in the food sector. Its water retention and binding properties make it sound like a mortar and plaster component in construction. In pharmaceuticals, methylcellulose is used as a binder in tablet formulations, which helps to improve tablet cohesion and disintegration qualities.

Carboxymethyl Cellulose

Carboxymethyl cellulose, or CMC, is a cellulose derivative modified by adding carboxymethyl groups. It is water soluble and has strong thickening and stabilizing characteristics. CMC is commonly used in the food sector as a thickening and stabilizer in items including ice cream, sauces, and beverages. CMC acts as a binder in tablet formulations in the pharmaceutical industry, facilitating the correct disintegration and release of active substances. In addition, it is used in manufacturing personal care products and as a drilling fluid additive in the oil and gas industry.

The market can be bifurcated by application into Construction, Pharmaceutical and Personal Care, and Food and Beverage.

Construction accounts for the largest share of the market.

Construction

The construction business contributed the most to cellulose ether revenue, accounting for more than 50% of the income earned in 2023. In the construction sector, cellulose ethers are used as additives in various applications. They improve the performance of construction materials, including cement, mortar, and plaster. Cellulose ethers have essential qualities such as water retention, workability, and adhesion, making them helpful in increasing the quality and longevity of construction materials. They are used in tile adhesives, grouts, cementitious renders, and plastering, helping to improve workability and cohesiveness in construction materials.

Pharmaceutical and Personal Care

Due to their flexibility, cellulose ethers are widely employed in the pharmaceutical and personal care industries. Medicines act as excipients in tablet formulations, providing binding properties for cohesive and dissolving tablets. Furthermore, the personal care industry uses cellulose ethers in oral care products, ointments, creams, and lotions. Their functions as thickeners, stabilizers, and rheology modifiers improve the texture, stability, and performance of pharmaceutical and cosmetic formulations.

Impact of covid-19

The COVID-19 pandemic disrupted almost all the business operations, primarily in the APAC and European regions. There were a lot of travel restrictions due to which the robotics production companies faced a lot of revenue loss during the year 2020. The production units had to be closed down due to the protocols and regulations issued by the government. This caused a decline in the market during the year 2020. The consumption of cellulose ether and its derivatives had fallen during this period. As a result, the cosmetics, pharmaceuticals, food and beverage industries, etc., faced a shortage of these necessary substances. 

The country which was first hit by the COVID-19 pandemic was China. As it has a good share in cellulose ether production, it caused a disturbance in the supply chain at a global level. Turn by turn, all the countries started facing the same issues, hampered production. The R&D in the health sector faced a shortage of raw materials, and due to economic tension, the research in healthcare development was temporarily paused. As the business is recovering from the pandemic, demand is gradually increasing. This has compelled the manufacturing units to increase their production capacities up to 100%. 

Market Recovery Timeline from the Impact of COVID-19 and its Challenges

In the post-COVID-19 period, operations were back on track with net inflow investments across the medical care and healthcare industry. Despite the availability of funds, COVID-19 cases began rising, and many countries went into lockdown again. The international restrictions with the second and third waves aggravated the circumstances. Following the ascent in COVID-19 cases, worldwide head-out limitations were relied upon to be ready for a couple of months, further hampering the worldwide healthcare, cosmetic and personal care products. The fully automated manufacturing systems are changing the landscape of the manufacturing industry.

The demand for cellulose ether and derivatives started increasing with the successful vaccination programs. After the second and third COVID-19 waves hit the global business sectors, supply chains have effectively continued working. As the interest in cosmetic and personal care brands is developing, the demand is considerably increasing. Also, contract research associations (CROs) that had halted their R&D operations are believed to reemerge again in the cellulose ether and subordinate’s market. This will contribute to the overall growth of the market. 

Recent Developments

• January 2024- Dow obtained ISCC PLUS certification for PO/PG and Polyol manufacturing in Freeport, Texas.
• November 2023- Ashland Perfectyl™ biofunctional chamomile, inspired by innovative aesthetic procedures, allowed users to achieve skin perfection without injections.
• January 2024- Nouryon announced the debut of Berol® Nexus surfactant during the 2024 ACI Annual Meeting and Industry Convention in Orlando, Florida, USA. The Company's most recent innovation, intended for the North American cleaning market, is a next-generation, multifunctional hydrotrope.